Fortnightly - Bridgestonehttp://www.fortnightly.com/tags/bridgestone
enISO 50001: Busy Work or Revolution?http://www.fortnightly.com/fortnightly/2013/05/iso-50001-busy-work-or-revolution
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Supporting continuous improvement in energy management processes.</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Chad Gilless</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><b>Chad Gilless</b> (<a href="mailto:cgilless@enernoc.com">cgilless@enernoc.com</a>) is an engineering and energy management practice lead with EnerNOC Utility Solutions.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - May 2013</div></div></div><div class="field field-name-field-import-image field-type-image field-label-above"><div class="field-label">Image:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1305-TC-fig1.jpg" width="1372" height="1093" alt="ISO 50001 U.S. Implementations" title="ISO 50001 U.S. Implementations" /></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>Increasingly, manufacturers of various products are selling to other companies—such as Walmart, Ford, Siemens, and Nestle—that have energy efficiency requirements for their suppliers and vendors. International standards have been an effective way for firms to prove their commitment to continuous improvement, as shown by the 25,000 U.S. firms that have signed on for the ISO 9001 quality management standard, many in response to global supply chain demands. For utilities, the new ISO 50001 standard on energy management systems offers an opportunity to engage manufacturing customers in ongoing energy savings initiatives that deliver real end-use business benefits and competitive advantage.</p>
<p>In the past 10 years, utilities and their customers have recognized the significant opportunity to realize savings by integrating energy management practices into every aspect of a customer’s business. Broadly speaking, this approach, called strategic energy management (SEM), has two components: a deep review of energy usage to identify potential savings from changes in operations and maintenance and in behavior, in addition to what can be obtained through equipment upgrades; and a continuous improvement approach to energy consumption, using classic “plan-do-check-act” methodologies. However, historically there were no standards for implementing SEM.</p>
<p>In 2011, the International Organization for Standardization (ISO) introduced ISO 50001 for energy management systems, applying the same systematic approach as in ISO 9001 but this time focused on reducing energy consumption. Now, for the first time, an international standard unites organization-wide business practices with a clearly defined management system to drive persistent energy savings. In its short life, the standard has seen rapid uptake globally. Already, more than 1,000 companies around the world have been certified to ISO 50001 at more than 1,500 locations. Adoption in the United States is steadily increasing, led by companies such as 3M, Bridgestone Tire, IBM, and Schneider Electric. While manufacturers are the typical adopters, we have also seen certification by retailers, public facilities, and hospitals.</p>
<p>From the utility perspective, customers who adopt the ISO 50001 standard become world-class practitioners of energy management and active, engaged partners in utility energy efficiency and demand response programs. The ISO 50001 standard offers tangible benefits to a utility’s manufacturing customers, helping to support and increase their competitiveness. Manufacturers’ goals typically go beyond certification, and on to the energy savings and higher level of operation. The ISO 50001 structure and focus on energy performance helps drive those results.</p>
<p>Manufacturers are often concerned that undertaking a system certification initiative such as this can result in a burdensome load of paperwork and recordkeeping, with no clear benefit. However, to date ISO 50001 has shown real promise for return on investment. Sorting through the reality and the hype of ISO 50001, it appears that adopting this new standard is beneficial to many areas of industry, but especially to the manufacturing sector. In March 2013, the U.S. Department of Energy provided early case study results from seven facilities that have implemented ISO 50001 in the past 18 months. One key finding from these results shows that six out of seven facilities realized a return on the investment in two years or less.</p>
<p>The challenge for utilities today is to understand what ISO 50001 offers their manufacturing customer base, what opportunities the standard could bring to utility energy efficiency programs, and how utilities can successfully incorporate the standard into their energy efficiency portfolios.</p>
<h4>What is ISO 50001?</h4>
<p>The heart of ISO 50001 compliance is a comprehensive energy management system (EnMS). Despite the identical term, an EnMS isn’t to be confused with the software category of energy management systems (EMS). Rather, an EnMS is a management approach for energy, similar to a quality management system. An ISO-compliant EnMS includes an energy policy, energy teams, clear management involvement, energy-related purchasing procedures, energy goals, employee engagement, and numerous other structures and processes. </p>
<p>ISO-compliant companies also have energy performance indicators (EnPIs), which are the metrics used to drive improvement and meet goals. The standard doesn’t define which EnPIs to adopt but leaves that flexibility to each company—<i>e.g.,</i> kWh/widget, therms/square foot, BTUs/month. Those companies that pursue the ISO 50001 designation also commit to an initial independent third-party certification of their energy management system, annual surveillance audits, and a thorough recertification every three years. </p>
<p>These three elements—a management system, performance indicators, and external certification—have proven to drive results in quality, environmental impact, safety, and, most recently, energy management. This systematic approach leads to greater and more persistent energy savings, improved productivity and uptime, and better employee morale.</p>
<p>Before ISO 50001, some companies applied the broader ISO 14001 standard for environmental management systems to address their energy management efforts. However, ISO 50001 strengthens the requirement for energy objectives and targets, for an energy management system, for setting energy performance indicators, and for reporting of the verification results. The United States and other ISO delegations created ISO 50001 as a more focused standard to drive specific energy performance results, thus keeping the administrative overhead to a minimum.</p>
<h4>Strategic Energy Management</h4>
<p>Moving forward, energy will be on the front burner for many manufacturing customers for several reasons. First, cost control remains a critical issue and energy is a major budgetary item for most manufacturers. Second, sustainability issues in general, and greenhouse gas concerns in particular, have forced executives to stay on top of energy consumption to appease investors and customers. Finally, savvy manufacturers have found that energy is an important indicator of waste in their facilities, such as machinery running when it doesn’t need to (leading to increased wear and tear) or oversized capital equipment (leading to unnecessary costs). </p>
<p>Manufacturers are finding that implementing ISO 50001 provides a more strategic approach to energy management. Implementing this standard means a company is investing in its operations, how it manages energy, and ultimately its future viability, in a more thoughtful way. </p>
<p>Going into an ISO 50001 implementation with this sort of understanding means energy managers know the results will be different—<i>i.e.,</i> more strategic and longer term than a typical retrofit project. Specifically, ISO 50001 enables manufacturers to build a robust management system for energy and to take a fundamentally different approach to more traditional <i>ad hoc</i> projects. With this standard, companies integrate energy in areas from procurement all the way through to the production line.</p>
<p>Initial reports indicate that results carry beyond the production line to the customer level. As mentioned above, some of the world’s largest companies have begun to ask their suppliers about their energy policies, looking for evidence that their suppliers manage energy in a way that controls costs and mitigates risks. It’s one thing for suppliers to simply tell customers that they have energy plans and that they’re driving towards results, but quite another to provide ISO 50001’s third-party certifications to prove the seriousness of their commitments. For example, General Dynamics recently said that its government funders are more comfortable with reported results after General Dynamics deployed ISO 50001. And Volvo North America has invited energy team members into sales meetings to discuss energy with prospective customers.</p>
<p>Companies can also expect to see positive changes in employee behavior as a result of implementing ISO 50001. Similar efforts in SEM have boosted morale due to the focus on employee awareness and engagement around energy. Employees are made aware of how they affect energy consumption, are encouraged to identify ways to improve efficiency, and where appropriate are rewarded for their positive engagement. ISO 50001 compliant companies typically have energy idea suggestion programs, and when it makes sense for their organizational culture, some organizations have put on so-called “energy rodeos” where they educate employees on their energy program, let people operate energy efficiency equipment like leak detectors, and provide inexpensive giveaway items like compact fluorescent light bulbs. </p>
<p>Interestingly, new regulations are starting to allow ISO 50001 as a means to reduce the burden of compliance. For example, in the EPA’s new Boiler Maximum Achievable Control Technology (MACT) rules, companies with ISO 50001 are exempted from specific parts of the regulation.</p>
<p>Generally speaking, SEM implementations yield savings of up to 20 percent, with typical results in the 5- to 10-percent range. Of the 14 facilities that have completed DOE’s ISO 50001-based Superior Energy Performance program, the savings range was 6.2 to 25.8 percent.</p>
<h4>Standardize, Persist, Excel</h4>
<p>Utilities across North America, from BC Hydro to Xcel Energy, have found that SEM is an important part of their demand side management (DSM) portfolio. For Energy Trust of Oregon, SEM makes up over 20 percent of its industrial program savings, and Bonneville Power Administration recently verified that its SEM program resulted in 4.4-percent electricity savings as a share of customer energy consumption. SEM moves customers from <i>ad hoc</i> projects to systematic savings in energy and demand. Moreover, SEM programs have produced more proactive customer relationships for many utilities. Finally, SEM allows utilities to capture behavioral savings from commercial and industrial customers that are similar to those they’ve started to capture from residential customers. </p>
<p>ISO 50001 takes SEM programs to the next level by introducing standardization as well as increased persistence that comes from regular recertification. This persistence is particularly interesting for utilities implementing SEM initiatives. Many utilities have seen success or are very interested in behavioral programs in the residential sector, and they’re looking for the same level of innovation in the commercial and industrial (C&amp;I) sectors. A smaller number of utilities have C&amp;I SEM programs, and within this group an even smaller number of utility SEM programs address behavioral savings. Two of the main challenges to growing behavioral savings-based SEM programs are that 1) utilities aren’t confident in quantifying the SEM-related behavioral savings, and 2) they’re unsure of the persistence strategies for those savings. </p>
<p>As a more formalized and complete approach to SEM, ISO 50001 helps utilities address current barriers to behavioral-based SEM program adoption. The standard includes technical components that support the quantification of savings, such as baselines, energy performance indicators, and significant energy users—<i>i.e.,</i> equipment and processes that consume energy. In addition, ISO 50001 has requirements that address persistence, where managers continually follow up with members of the energy team on improvements to ensure they keep producing expected results. Both of these areas are locked in by third-party certification to add a degree of confidence needed for a utility program. </p>
<p>If a manufacturing customer already has experience with a utility SEM program, then ISO 50001 can be the logical next step to help secure the next level of energy efficiency gains. If a customer hasn’t yet engaged in a utility energy efficiency program, then looking at SEM first might be the best course of action.</p>
<h4>Incentives for Sustainable Results</h4>
<p>Some utilities are beginning to study how ISO 50001 can integrate with their efforts, and in one case, a public benefits administrator is deploying ISO 50001 test offerings to determine how the standard can be a driver of SEM and of energy savings. Updates on these tests will be provided at the 2013 ACEEE Industrial Summer Study in July. By stepping in with incentives, utilities and public agencies can help move their customers over the investment hump to get ISO 50001 projects completed. This incentive can become an effective component of a utility’s key account management program—offering important C&amp;I customers significant business value add and white-glove service within the utility DSM program. As utilities consider programs to incentivize ISO 50001 as part of an energy efficiency program, SEM-focused or otherwise, it’s important for utilities to evaluate the opportunity based on and understanding of what makes a C&amp;I customer ISO 50001-ready, what it takes for the customer to become ISO 50001 compliant, and the costs of compliance.</p>
<p>Implementing the ISO 50001 standard does entail significant change within an organization. The best candidates meet two main criteria: the right experience and the right culture. First, it’s important that an organization already has positive exposure or experience of some degree with management systems that feature a continuous improvement effort, such as lean manufacturing, Six Sigma, or other systems of quality management. It’s crucial that the organization has experience with a higher level, programmatic initiative that’s forward thinking and more proactive than reactive. Second, the organization’s culture must be focused on continuous improvement. As an example, during a recent visit with a utility’s manufacturing customer, one facilities manager expressed his company’s commitment by directing attention to a poster on the wall that illustrated the drive to be “world class,” and elaborated that he often talks with colleagues about wanting to be world class in all aspects of their operation, including energy management.</p>
<p>Both of these attributes are typically more common in manufacturers, where management systems and continuous improvement have been applied for numerous decades. A commercial or institutional customer typically doesn’t have this background. This doesn’t mean that ISO 50001 isn’t a worthy standard for these entities; indeed, ISO 50001 was crafted for all organizations of all types and sizes. However, manufacturing companies might find it more aligned with concepts already integrated into their business.</p>
<p>Energy management needs to be approached in the same way companies tackle quality management, environmental impact management, and safety. Like all of these systems, energy management needs to be a component of business practices that a company wants to manage in a world-class way across the board.</p>
<p>The good news is that the scope of the standard is typically drawn at the facility, so companies aren’t required to make global changes. Yes, organizations do look at implementation across the enterprise, but decisions are mostly made at a facility level where energy is being consumed.</p>
<p>When it becomes clear that an organization is a good fit for ISO 50001, another set of questions arises around resources: what’s needed for success in terms of cost, labor, and time? This is where utility program design comes in. Utilities have multiple possible intervention points: support for professional services to reach compliance; support for certification itself; incentives for behavioral savings; and incentives for measures arising out of the ISO program.</p>
<p>The first task for the customer is to put an energy team together. It’s absolutely vital that this team include an engaged executive sponsor and a competent project manager. Once the team is in place, it needs to pursue several activities, including understanding the significant energy users in the organization and having a plan to address those high-demand SEUs, perhaps via audits or by engaging and training those employees who affect those SEUs. The team also needs to consider rebranding or revising the messaging of a company’s environmental and sustainability programs to explicitly include expectations about energy management. And it should determine whether energy management training can be incorporated into existing formal training programs, or whether an entirely new training program is needed. </p>
<p>Typically, this strong internal team needs to be complemented by a few external roles. The first external role should be filled by a firm that certifies the company, such as an accredited third-party certification body or registrar. Next in the line-up should be an implementation coach. Companies can self-deploy ISO 50001 in theory, but it’s much better to bring in a seasoned practitioner with experience implementing the elements of the standard. Just as elite athletes still use coaches, high performing organizations still need an external individual who can guide the company through the process, guiding them on each aspect of ISO 50001 as it’s implemented at a facility. Finally, companies need a technical coach who can advise on the standard’s technical components. For example, the facility might need a robust energy savings model, with a defensible baseline and meaningful energy performance indicators. This technical coach guides this process, and helps connects the EnMS to traditional energy savings activities, such as identifying energy savings opportunities and ensuring that the organization is taking action on these measures and opportunities.</p>
<p>The essence of coaching isn’t to burden the process with consultants, but instead to implement a solid EnMS that produces results and is as effective as possible. The implementation coach will conduct mock audits to identify implementation gaps in the EnMS and feed recommendations back to the facility energy team to address these issues. After the organization is running its EnMS with feedback from the implementation coach, the energy team will understand the process, so external certification will be as smooth as possible. </p>
<p>An ISO 50001 implementation creates a significant workload, but generally only lasts about three to six months, depending on how many management processes are already in place. For a company with an established green team, familiarity with ISO or other external certification processes, and formal training programs in place, adjusting to meet the ISO 50001 standard should be workable within the constraints of employees’ existing roles and responsibilities.</p>
<h4>ISO 50001 Cost-Benefit</h4>
<p>Two main cost drivers factor into ISO 50001 certification at a facility: employee count and facility complexity. Based on these two drivers, certification costs for most organizations are likely to fall somewhere between $15,000 and $25,000. Of course, there are always exceptions. A giant organization with many employees and massive energy use could top the high tens of thousands or even hit the hundred-thousand dollar mark to certify one facility, but that’s an anomaly.</p>
<p>Like any investment, ISO certification must be weighed against many options inside the firm. Savvy organizations are seeing the real savings from energy management and are applying energy savings to additional energy savings efforts. </p>
<p>For a utility program manager, an ISO program will have a few cost categories: internal program costs such as administration, marketing, and evaluation; program delivery costs that would typically go to ISO 50001 experts, with focused expertise in ISO’s management system and technical system components; and any incentives that the utility might provide to the customer for energy savings or to offset any ISO-related customer costs. </p>
<p>It’s important to note that companies must be recertified every three years. However, this process is much less intensive than the original certification, as organizations already have a functioning EnMS that has been reviewed annually. With that, the recertification costs much less than the original certification. In between recertifications, an ISO certification body also conducts annual surveillance audits, which are all much lighter and focus on verifying that a company’s program is meeting its original intent.</p>
<p>In any case, the costs of ISO 50001 certification are routinely outweighed substantially by the benefits. In the two years since it was launched, ISO 50001 has gained rapid traction worldwide as a way for companies to strategically drive energy performance. New companies are being certified every month. Adoption in Europe has been much more rapid than in North America—about 50 percent of European certifications currently are in Germany. However, the close links within global supply chains, not to mention European ownership of U.S. facilities, likely will lead to increasing interest in North America.</p>
<p>From a utility perspective, with an increasing body of evaluated programs, SEM is proving to be a valuable addition to DSM portfolios. SEM programs improve customer relationships, deliver savings, and ensure persistence of those savings. By stepping in with an ISO 50001 program, even at the pilot stage, utility DSM managers essentially raise the bar, resulting in a more robust SEM offering at the customer level as well as in greater and more persistent energy savings.</p>
</div></div></div><div class="field-collection-container clearfix"><div class="field field-name-field-sidebar field-type-field-collection field-label-above"><div class="field-label">Sidebar:&nbsp;</div><div class="field-items"><div class="field-item even"><div class="field-collection-view clearfix view-mode-full field-collection-view-final"><div class="entity entity-field-collection-item field-collection-item-field-sidebar clearfix">
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<div class="field field-name-field-sidebar-title field-type-text field-label-above"><div class="field-label">Sidebar Title:&nbsp;</div><div class="field-items"><div class="field-item even">For Further Reading</div></div></div><div class="field field-name-field-sidebar-body field-type-text-long field-label-above"><div class="field-label">Sidebar Body:&nbsp;</div><div class="field-items"><div class="field-item even"><!--smart_paging_autop_filter--><!--smart_paging_filter-->• International Standards Organization: ISO has some nice articles and videos on its website related to the standard. The organization’s publication, “Winning the Energy Challenge with ISO 50001,” is one of the better written overviews of the standard.
• U.S. Department of Energy: The DOE has numerous resources on its ISO 50001 website. This information is targeted at energy managers and other persons who are interested in getting their organizations certified.
• Natural Resources Canada: NRCan will provide financial assistance up to 50 percent of eligible costs to a maximum of $25,000 for ISO 50001 implementation. This can make a good deal of sense to push the justification of ISO over financial hurdles of an individual facility or for a utility program manager.–CG</div></div></div> </div>
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</div></div></div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/commercial-industrial">Commercial &amp; Industrial</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/customer-engagement">Customer Engagement</a></li><li class="taxonomy-term-reference-2"><a href="/article-categories/dr-conservation">DR &amp; Conservation</a></li><li class="taxonomy-term-reference-3"><a href="/article-categories/energy-policy-legislation">Energy Policy &amp; Legislation</a></li><li class="taxonomy-term-reference-4"><a href="/article-categories/management-leadership">Management &amp; Leadership</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/technology-corridor">Technology Corridor</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1305-TC.jpg" width="1448" height="883" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
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<a href="/tags/iso-50001">ISO 50001</a><span class="pur_comma">, </span><a href="/tags/efficiency">efficiency</a><span class="pur_comma">, </span><a href="/tags/energy-management-systems">energy management systems</a><span class="pur_comma">, </span><a href="/tags/strategic-energy-management">strategic energy management</a><span class="pur_comma">, </span><a href="/tags/sem">SEM</a><span class="pur_comma">, </span><a href="/tags/consumption">consumption</a><span class="pur_comma">, </span><a href="/tags/international-organization-standardization">International Organization of Standardization</a><span class="pur_comma">, </span><a href="/tags/iso">ISO</a><span class="pur_comma">, </span><a href="/tags/3m">3M</a><span class="pur_comma">, </span><a href="/tags/bridgestone">Bridgestone</a><span class="pur_comma">, </span><a href="/tags/ibm">IBM</a><span class="pur_comma">, </span><a href="/tags/schneider">Schneider</a><span class="pur_comma">, </span><a href="/tags/enms">EnMS</a><span class="pur_comma">, </span><a href="/tags/enernoc">EnerNOC</a><span class="pur_comma">, </span><a href="/tags/energy-performance-indicators">energy performance indicators</a><span class="pur_comma">, </span><a href="/tags/enpi">EnPI</a><span class="pur_comma">, </span><a href="/tags/energy-rodeo">energy rodeo</a><span class="pur_comma">, </span><a href="/tags/maximum-achievable-control-technology">Maximum Achievable Control Technology</a><span class="pur_comma">, </span><a href="/tags/mact">MACT</a><span class="pur_comma">, </span><a href="/tags/bc-hydro">BC Hydro</a><span class="pur_comma">, </span><a href="/tags/xcel-energy">Xcel Energy</a><span class="pur_comma">, </span><a href="/tags/demand-side-management">Demand side management</a><span class="pur_comma">, </span><a href="/tags/dsm">DSM</a><span class="pur_comma">, </span><a href="/tags/energy-trust">Energy Trust</a><span class="pur_comma">, </span><a href="/tags/bonneville-power-administration">Bonneville Power Administration</a><span class="pur_comma">, </span><a href="/tags/ci">C&amp;I</a><span class="pur_comma">, </span><a href="/tags/aceee">ACEEE</a><span class="pur_comma">, </span><a href="/tags/six-sigma">Six Sigma</a><span class="pur_comma">, </span><a href="/tags/quality-management">quality management</a><span class="pur_comma">, </span><a href="/tags/significant-energy-users">significant energy users</a><span class="pur_comma">, </span><a href="/tags/seu">SEU</a> </div>
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Fri, 03 May 2013 22:22:56 +0000meacott16573 at http://www.fortnightly.com